5 things to know about business trademarks

By Daniel Shaw of Scaringi Law posted in Business Law on Thursday, September 8, 2016.

word bubble

These days, business is all about branding. In order to stand out from the crowd, a simple symbol, logo, word or expression may be one of the most important things in your business.

From Coca-Cola® to Kodak® to the Nike® swoosh®, the power and brand-boosting potential of a great trademark is evident. No wonder an entire class of law protects these words, symbols and marks.

Here's what businesses should know about trademark law and protecting yours.

Identifying types of trademarks

A word or words used as an identifier can easily become a trademark. Frequently, the word associated with a new business or product is made up -- what the law refers to as a "fanciful term." "Kodak®," for example, didn't mean anything until it became synonymous with all things photographic produced by the Eastman Kodak Company.

Within the realm of words, there are different types of trademarks. A "standard character mark,", for example, protects the mark in all forms. A "stylized" mark, on the other hand protects a particular stylistic rendering of the mark, such as Coca-Cola®'s cursive name emblazoned on every bottle and can. "Coca-Cola" is, of course, also registered as a standard character mark.

Grand designs

Many experts in business and advertising believe symbols are even more powerful than words. Some original, eye-catching design can embody everything about a business brand.

The Nike swoosh stands out in this category. How much is it worth on all those shoes, team uniforms and golf bags? Its value is impossible to calculate.

Beyond symbols, even a specific color can be protected. Think pink for Owens Corning fiberglass, for example.

Sometimes, even a sound can be protected as a trademark, assuming that it has acquired sufficient secondary meaning. Tarzan's signature yell and the three-tone NBC chimes are examples of registered sound marks. Even a common song which is famously used in connection with a particular good or service can act as a trademark. An example of this would be the Harlem Globetrotters' use of the melody "Sweet Georgia Brown."

Protecting your mark

Trademark rights and legal protection attach as soon as you begin using an original word, symbol or logo in connection with a good or service. This protection is derived from the common law roots of trademark law - and it begins with use.

There are limits to these rights. Geographic limits can affect the scope of use. The mark, along with its rights and protection, also must be tied closely to the product or service.

The letters "TM" next to the mark asserts common law trademark protection. "SM" denotes a service mark. Should you want more protection, federal registration is available. Marks which have been so registered may be followed by "®," denoting that the mark has been duly registered with the United States Patent and Trademark Office.

Commerce counts

The federal power to regulate trademarks is based on the Commerce Clause of the U.S. Constitution, which gives Congress the power "to regulate commerce with foreign nations, and among the several states, and with the Indian tribes."

This also means that to qualify for federal registered trademark protection, your mark must be used in interstate commerce. So it might not be possible for a local landscaping business to obtain federal registration. A local hotel or motel, however, may obtain federal registration due to its provision of services to interstate travelers.

Moreover, in these days of e-commerce, with even local business selling across the country via the Internet, it is easier to prove interstate commerce.

Defending your mark

The purpose of trademark law is to prevent consumer confusion and protect the investment made by a business to develop goodwill in the minds of consumers. For a business, this means making sure that when a consumer sees your mark, they know that the goods or services come from you. To protect this mental association and defend your mark against other businesses, it may be necessary to sue. These kinds of legal cases can get complicated quickly, but come down to one question: how likely is it that the allegedly infringing use of a mark will cause confusion in the minds of consumers. This "likelihood of confusion" inquiry turns on a number of factors, among which are: the similarity of the competing marks; the proximity of the goods represented by the marks; and the strength of the marks.

These questions can be very subjective. The more similar the marks and the more similar the goods, the stronger the case for trademark infringement and unfair competition will be.

However, if the strength of the original mark could lead to confusion even if used in connection with a dissimilar product, infringement can still be found. You can't start making dishwashers, slap the Nike swoosh on them and launch an advertising campaign around "just do the laundry." Athletics may be a world away from dirty laundry, but the swoosh is simply too connected to Nike.

If a defendant is found liable for trademark infringement, injunctive relief is usually provided, i.e. the defendant is ordered to stop using the mark and to remove it from all products. The prevailing party may also be awarded the defendant's profits which are attributable to the infringement, their own damages attributable to the infringement, and their costs of suit. Depending on the case, treble damages can be awarded as compensation to the prevailing party.

Because of the high cost of defending against an infringement suit, it is vital to ensure that the word, logo, phrase, etc. that you wish to use as a mark is not already in use by another business. A penny spent on trademark clearance can save you a dollar in litigation costs down the road.

Daniel William Shaw focuses his practice at Scaringi Law on civil litigation, intellectual property law & copyright, and firearms & second amendment law. He can be reached toll free at 877-LAW-2555 or at info@scaringilaw.com


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